A Second Ex-Official Is Accused Of Theft From L.I. School District

Published: January 19, 2005

For the second time in less than a year, a retired administrator in one of Long Island's largest school districts has been charged with stealing hundreds of thousands of dollars in the twilight of his career.

The administrator, Daniel C. Cifonelli, a former assistant superintendent for business of the William Floyd School District, was charged Tuesday with stealing $687,850 from the district and the state's teachers' pension system. His arrest comes seven months after the district's former treasurer was charged with writing at least $700,000 in checks to himself from the district.

Suffolk County prosecutors said Mr. Cifonelli, 70, of Port Jefferson Station, funneled $243,082 from the district to his bank account and brokerage account. Prosecutors said he also improperly collected $444,768 in pension funds after retiring in 1998, even as he continued to work as a consultant in an almost identical job.

Mr. Cifonelli pleaded not guilty Tuesday afternoon in Suffolk County District Court here and was released on $5,000 bail.

His arrest comes two weeks after State Comptroller Alan G. Hevesi issued a scathing audit of Miller Lilly & Pearce, an accounting firm that audits more than a third of Long Island's school districts, including William Floyd and Roslyn. In Roslyn, officials have been charged with siphoning more than $2.3 million from the district.

To residents in the William Floyd district, based in Mastic Beach, Mr. Cifonelli's arrest was an expected development in a scandal that has swirled and deepened since it broke last spring. Mr. Cifonelli was dismissed in June after the district said it had discovered financial irregularities.

The district's former treasurer, James Wright, has pleaded not guilty in the $700,000 theft. Investigators have hauled away boxes of documents from the district's offices. So far, prosecutors have determined that nearly $1.5 million has been stolen from the 10,000-student district.

''The William Floyd School District is plagued by theft, fraud and abuse,'' said Thomas Spota, the Suffolk County district attorney. ''The taxpayers of this district should be outraged.'' Mr. Spota said his office was also investigating six other districts in Suffolk County, but would not identify them or discuss the details.

In a statement, the district said it had recovered all the stolen money, strengthened its background checks on new employees, tightened its spending controls and cooperated with prosecutors. The district would not elaborate on how or from whom the money was recovered.

Still, the school board's president, Vincent Pascale, said the arrests had tarnished the district's image.

''When something like this happens, it's a black mark,'' Mr. Pascale said in an interview. ''It's just a horror. The board and the district has done everything correct to try to put this thing on the right track.''

Prosecutors said the district had cooperated with the investigation to some extent, but criticized a board member for refusing to speak with detectives. They also said the district's former auditor, Lotierzo Associates, had prepared personal tax returns for some administrators and board members, and said its oversight was generally lax.

In Mr. Cifonelli's case, prosecutors said he took hundreds of thousands of dollars from school district insurance accounts and other accounts from February 1999 to January 2003, transferring the money to his own accounts or using it to pay off loans.

He often had Mr. Wright, then the treasurer, cut the checks, prosecutors said. Mr. Wright has not been charged with any additional crimes, and his lawyer would not comment on the new allegations.

All of this occurred while Mr. Cifonelli was technically retired and collecting a pension, prosecutors said. Mr. Cifonelli retired in 1998, but was immediately hired as a consultant under the name D.C.C. Consulting, prosecutors said.

''He left on Friday as an employee, and he came back as D.C.C. Consulting Monday morning,'' said Maureen McCormack, the lead prosecutor.

Mr. Cifonelli's position as assistant superintendent and consultant were identical -- the same hours, same title, same duties and same benefits, prosecutors said. The difference was that he collected a total of $444,768 in pension money while earning about $150,000 per year from the district.

Mr. Spota said the school board approved Mr. Cifonelli's retirement and the hiring of D.C.C. Consulting in one meeting. The board has not turned over any contract outlining his duties or salary to prosecutors. And half of his pay was deposited into his private brokerage account.

''In essence, he was only being taxed on one-half of the monies,'' Mr. Spota said, adding that the school board ''knew it, or they should have.''

District officials have praised Mr. Cifonelli, calling him a respected administrator who was instrumental in securing state funds for a decade-long, $200 million series of construction projects. He worked in the district for at least 14 years and served in the Navy before that.

At his arraignment, Mr. Cifonelli stood silently in a thin teal jacket as his lawyer, Paul Gianelli, described him as an old man who needed eye surgery and deserved a low bail.

''The sole source of his income is his Social Security,'' Mr. Gianelli told Judge John Toomey.